BOTH BUSINESS AND SOCIETY STAND TO BENEFIT FROM WORKING TOGETHER,

SECRETARY-GENERAL SAYS

Economic Development of Poorest Countries

Is of Fundamental Long-Term Interest to Global Community

Following is the text, as delivered, of remarks by Secretary-General Kofi Annan at “Business Day”, organized by Business Action for Sustainable Development, in Johannesburg on 1 September:

I am extremely happy to be able to join you for this meeting, and to share a few remarks with you on the role business can and must play in development if development is to succeed in a sustainable way, particularly among the poorest countries.

Ten years ago, at the Rio Earth Summit, the role of business in sustainable development was poorly understood.  It wasn’t clear whether, and in which ways, the private sector could be part of the solution to the broad challenges facing the world as we struggle with the balance between development and the environment.

Much has changed since a decade ago.  Today, there is growing recognition that lasting and effective answers can only be found if business joins in partnership and working together with other actors including government and civil society and of course trade unions and we all have to remain fully engaged. 

We now understand that both business and society stand to benefit from working together.  And more and more we are realizing that it is only by mobilizing the corporate sector that we can make significant progress.

The corporate sector has the finances, the technology and the management to make all this happen.  The corporate sector need not wait for governments to take decisions for them to take initiatives.

Individual managers, individual corporations can set their own standards and make their staff and their workers feel proud of the values and the standards of their companies.

And I believe on the side of business as well, business has come to realize that if it wishes to thrive in a complex and sometimes hostile global economy, it

must respond to the major social and environmental trends and challenges that are reshaping our world. 

Businessmen and women understand together that profits can be sustained, in the long run, only if social and environmental issues are effectively addressed.        Businesses have realized that they cannot be indifferent to the stresses and the difficulties in their own societies; that they have to be a part of society; and they have to learn to resolve issues that affect their societies for them to be able to thrive in the long run.

The environment provides a prime example of what I am saying.  Controlling pollution and the emission of greenhouse gases have historically been viewed by many companies as social issues entailing burdensome costs.  Yet, today, there is broad recognition of the fact that corporate pollution invites high costs and wastage for business itself. 

It can very often be addressed with better technologies and improved methods of production -- and firms that do this become more competitive, not less.

My dear friends, some of the world’s leading companies have expressed a strong commitment to sustainable development and corporate citizenship, and are here, with us at this summit. 

This values-based management is essential.  This approach lies at the heart of the Global Compact initiative that I launched in July 2000. 

The Compact brings companies together with United Nations agencies, labour and civil society to foster action and partnerships in support of nine principles in the areas of human rights, labour and the environment.  It has grown into a broad-based network that now encompasses many many companies from every continent, in addition to dozens of organizations representing international labour, civil society groups and others.

One of the strengths of the Compact is that it involves all the relevant social actors:  governments, who defined the principles on which the initiative is based; companies, whose actions it seeks to influence; labour, whose hands are literally the producers of global wealth; civil society organizations, representing the wider community of stakeholders; and the United Nations, the world’s only true universal political forum.

I think that we realize that governments cannot do it alone.  I think governments are also realizing this, and that today we live in an era of partnerships; we need to come together to improve our efforts to make an impact on the great challenges facing us today; and that governments, business and civil society, foundations and universities have to come together.  I think in the last five years we have seen this movement grow and grow in its impact.

At this Summit, the Global Compact is addressing one of the central problems of development -– the financial and economic marginalization of the world’s least

developed countries, most of which are based in sub-Saharan Africa.  Mobilizing business investment which is sustainable and produces positive results –- both for the societies and the investing companies -– is essential if the least developed  countries are to escape their desperate poverty trap. 

The Compact is seeking a commitment from companies to grow their businesses over the next five years in some of the least developed countries in line with the principles of the Global Compact and those of sustainable development generally.  The economic development of the poorest countries is of fundamental long-term interest to the global community, including the private sector.  The present situation is fundamentally unstable.  We cannot afford to prolong it by allowing extreme social differences to persist.

Another important development is the growing support for the Global Reporting Initiative, which offers a coherent framework for reporting on environmental and social issues.  It is a crucial complement to the Global Compact, and I am very pleased that the United Nations Environment Programme is a driving force behind both of them.

This Summit marks an historic opportunity to further the role of business in advancing sustainable development.  The challenges are many, but the rewards are far greater -– for business, and for society as a whole and I hope we can move forward in partnership and make this world a better place for all and ensure that we can bring that essential balance between development and the environment and that we can exploit the resources of our planet in a manner that is really sustainable for future generations.

It can be done.  And I know you, Ladies and Gentlemen, in this room in the business sector make important decisions day in and day out and can make a difference if you make the right choices.  And if we don’t, we will come under pressure from society.

Of course pressure will also be on governments to take actions.  I hope by working in partnership, we can lead the way and we can make a start but it’s up to us.

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